TMI Blog2004 (5) TMI 71X X X X Extracts X X X X X X X X Extracts X X X X ..... such class of buyers. Therefore, the normal price of battery sold to MOD by the appellants is Rs. 33,393/- and the assessable value of silver used in the manufacture of such battery is at Rs. 2,500/- per kg. and cannot take the market value of silver. The contract between the MOD and the assessee provided for supply of silver from the mint at a particular rate and had to be supplied by the MOD and in lieu thereof the appellants were allowed to retrieve silver from old used batteries, and their special feature cannot be ignored. Batteries of the nature in question are largely used only by MOD. Hence the view taken by the Tribunal down to adjudicating authority cannot be sustained. .Appeal allowed accordingly - 898 of 1998 - - - Dated:- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... MOD in the price to be charged per battery. The appellants while invoicing the goods to the MOD, took the value of the silver used in those batteries as was recovered from the life expired batteries at the rate of Rs. 2,500/- per kg. as against Rs. 6,666/- per kg. which was adapted for the batteries supplied to HAL. According to appellants, the reason for taking the value of silver at Rs. 2,500/- per kg. was that the MOD was allowed to purchase the silver from the mint at the rate of Rs. 2,500/- per kg. and according to the contract, the stipulation was that the price of the silver to be adapted for arriving at the price to be charged was to be Rs. 2,500/- per kg. The Collector of Central Excise, Hyderabad, after noticing the difference in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or consideration is as to what is the assessable value of silver which is used in the manufacture of silver oxide zinc batteries supplied to MOD. Is it the price at which MOD got silver from the mint or the market price of the silver? The contention of the appellant is that the contract price at which the batteries are sold to MOD is the sole consideration of the sale of batteries to the MOD and on that contract price the assessable value of silver has to be determined. 4.Relying on the first proviso to Section 4(1)(a), which speaks about sale of goods, two classes of buyers and the price at which the goods are sold to each buyer should be taken as the normal price of such goods in relation to each such class of buyers, the appellants co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nded that in order to claim the benefit of the proviso, the appellant should show "normal practice" of whole sale trade. Since the supply of old life expired batteries to retrieve the silver forms a special arrangement it will not constitute a "normal practice". It is contended that even if some raw material is supplied free of cost for the purpose of excise duty, the market value should be taken into account. 7.Section 4 of the Central Excise and Salt Act deals with valuation of excisable goods which are chargeable to duty with reference to the value. Valuation is based ordinarily on the price thereof that is at the price at which goods subject to excise duty are sold by manufacturer to a buyer. In exceptional circumstances when the valu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tteries. As per terms of the contract, the appellants were to give a rebate to the MOD in the price to be charged per battery and this was the reason for the difference in prices between the batteries supplied to MOD and HAL. 10.The value of the silver supplied to the appellants is determinable. Had the stock of silver in the mint did not deplete, MOD would have supplied silver from the mint. Since the stock depleted, MOD supplied old life expired batteries for the recovery of silver. This will not make the value of silver undeterminable. The value of the silver supplied would be Rs. 2,500/- per kg., the price at which MOD would get the silver from the mint. The question of determining the assessable value of silver based on the value o ..... X X X X Extracts X X X X X X X X Extracts X X X X
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